INSIDER: Why Transparency Is a Prerequisite for Delivering on the Paris Agreement

We have reached the mid-point for the climate negotiations in Bonn, Germany, and negotiators are hard at work hammering out details on a range of issues, including the transparency and accountability requirements under the Paris Agreement. Delegates know that if approached correctly, these transparency and accountability provisions can catalyze greater efforts to curb emissions and build resilience to the consequences of climate change.

Below, we break down why it is so important for negotiators to get transparency and accountability under the Paris Agreement right – and a number of reasons to think they will.

How exactly does transparency and accountability drive climate action?

The historic climate summit in Paris last December requires countries to be more transparent about their climate actions than ever before, and has new provisions to hold them accountable. Countries are universally required to report their progress on reducing greenhouse gas emissions, building climate resilience, and better tracking the support they provide or receive. The Paris Agreement established a process to verify the data and information on both climate actions and ways countries provide support for a transition to a zero-carbon and climate-resilient economy. The Agreement also established a committee, whose modalities will now be developed, to facilitate implementation and promote compliance. These measures will inform whether countries are truly turning their commitments into on-the-ground action and ultimately if the global community delivers on the promise of the Paris Agreement.

Strong transparency and accountability rules under the Paris Agreement have implications for the corporate sector as well. Businesses’ ability and willingness to shift finance flows to climate-compatible investments and resilience strategies depends on how confident they are that the countries they operate in are taking serious measures to achieve their climate targets. Done right, transparency and accountability rules can result in a reinforcing cycle of verified action that builds confidence among governments, investors and shareholders.

What transparency and accountability measures for countries are in place already?

At the UNFCCC climate negotiations in 2010, countries agreed to share information every two years about policies and actions they have in place or plan to undertake to address climate change, based on their national priorities and circumstances. This verification process was differentiated between developed and developing countries resulting in an international consultation and analysis (ICA) of biennial update reports (BUR) for developing countries and an international assessment and review (IAR) of developed countries’ biennial reports (BRs). ICA and IAR consist of two steps: a country-level assessment undertaken by technical experts, followed by an open discussion with their peers about the efforts and progress made. The verification process agreed in Paris builds largely upon this experience.

By last year, all developed countries had their plans scrutinized by their peers. At this Bonn session, 13 developing countries (including Brazil, South Africa, Singapore and the Republic of Korea) are completing their verification cycle through what is called a “facilitative sharing of views" (FSV for short). This is quite a significant moment because developing countries had never been subject to scrutiny before, let alone in a multilateral setting.

The facilitative sharing of views takes the form of a workshop consisting of one- to three-hour sessions for each country or group of countries presenting their reports (BURs) followed by questions and answers by other parties to the UNFCCC. Observers can attend, but only country representatives will be able to submit written questions in advance and share their views during the session.

Moving from daunting to empowering: How can the transparency framework help developing countries manage?

A key condition for successful implementation of the Paris Agreement’s transparency requirements is the provision requiring adequate and sustainable financial support and capacity building. This will enable developing countries to significantly strengthen or scale up their efforts to build robust domestic and international measurement, tracking, reporting and verification systems, as well as more robust domestic and regulatory processes.

The good news is that various initiatives have been established since the Paris climate negotiations to build this capacity. The United States, Canada and the UK have already pledged about $35 million to the Capacity Building Initiative for Transparency (CBIT), established under the Paris Agreement, through the Global Environment Facility. And the Children’s Investment Fund Foundation (CIFF), Germany, Italy and the ClimateWorks Foundation have pledged $16 million to the Initiative for Climate Action Transparency (ICAT), which works to provide policymakers around the world with tools and support to measure and assess the effects of their climate actions.

To build capacity most effectively, these new initiatives should leverage the lessons, experience and work undertaken so far by UNFCCC thematic bodies, UNFCCC training programs and existing transparency-related initiatives or partnerships.

Are there opportunities for transparency and accountability to be further enhanced?

Yes, there are a number of opportunities both inside and outside the formal climate negotiations.

Within the UNFCCC, the design and implementation of the enhanced verification regime under the Paris Agreement can build upon the lessons from the first round of ICA and IAR. For instance, by introducing an intensive and thorough exercise for about 142 countries, the new review process will generate significant demand on the time, human and financial resources of the Secretariat and of governments. The Secretariat has struggled to find trained experts available to support this intensive review exercise. Tapping into the technical expertise and human resources of academics, NGOs and think tanks could help address this challenge.

Negotiators can further enhance transparency and accountability under the Paris Agreement by pursuing ways to:

empower citizens and wider stakeholders to participate in the design of national policies and the international verification process;

Furthermore, the COP presidencies could work with the Open Government Partnership (OGP), a coalition launched in 2011 to provide an international platform for domestic reformers committed to make their governments more open, accountable and responsive to citizens. The OGP global summit in December this year also provides a significant platform to promote transparency and public participation to address the effects of climate change.

Opportunities to enhance transparency are also available outside of the UNFCCC. The Financial Stability Board (FSB) established a taskforce in December 2015 aimed at highlighting the companies’ financial exposure to the risks of climate change. The task force is developing a voluntary, industry-led code for investors, insurers, banks and consumers to disclose more public information about the way they manage climate risks. This can help align public and private financial flows with a zero-carbon and climate-resilient trajectory, while also increasing companies’ and investors’ awareness and management of the effects of climate change and climate policy. France is the first country in the world to require its financial institutions to report the financial risks of their investments and measures adopted to mitigate that risk. Other countries should be inspired to follow their lead.

Transparency and accountability rarely steal the headlines at international climate talks, but they will serve a critical role in successfully implementing the Paris Agreement. At the recent Climate Action 2016 summit in Washington, D.C., Minister-in-charge of the Environment of the Kingdom of Morocco H.E. Dr. Hakima El Haite said that one of the main challenges in the months and years ahead will be to maintain and increase trust and deepen cooperation between countries and wider stakeholders. The prerequisite to trust? Transparency.